WSR 15-18-033 PROPOSED RULES OFFICE OF INSURANCE COMMISSIONER [Insurance Commissioner Matter No. R 2015-07—Filed August 25, 2015, 4:23 p.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 15-13-101.
Title of Rule and Other Identifying Information: Sharing of commissions by licensed insurance producers.
Hearing Location(s): Insurance Commissioner's Office, 5000 Capitol Boulevard, TR 120, Tumwater, WA 98504-0255, on October 8, 2015, at 1:30 p.m.
Date of Intended Adoption: October 9, 2015.
Submit Written Comments to: Jim Tompkins, P.O. Box 40258, Olympia, WA 98504-0258, e-mail rulescoordinator@oic.wa.gov, fax (360) 586-3109, by October 7, 2015.
Assistance for Persons with Disabilities: Contact Lori [Lorie] Villaflores by October 7, 2015, TTY (360) 586-0241 or (360) 725-7087.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The proposed rules will consider amending and/or adopting new rules to provide guidance to insurance producers regarding the sharing of commissions in conformance with new legislation (ESSB 5743).
Reasons Supporting Proposal: In August 2014 the commissioner adopted rules providing guidance to licensed insurance producers as to what may or may not constitute sharing commissions with nonlicensed persons. During the 2015 legislative session, legislation (ESSB 5743) was enacted that amended some of the statutes regarding what constitutes rebates and inducements, which in turn impacts the rules adopted in 2014.
Statutory Authority for Adoption: RCW 48.02.060 and 48.17.005.
Statute Being Implemented: RCW 48.17.490.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Mike Kreidler, insurance commissioner, governmental.
Name of Agency Personnel Responsible for Drafting: Jim Tompkins, P.O. Box 98504-0258 [40258], Olympia, WA 98504-0258, (360) 725-7036; Implementation and Enforcement: John Hamje, P.O. Box 98504-0255 [40255], Olympia, WA 98504-0255, (360) 725-7262.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The proposed rule replaces WAC 284-17-800, 284-17-820, and 284-17-830 in order to bring guidance regarding the sharing of commissions in conformance with SB [ESSB] 5743. The repealed sections had not gone into effect yet. The proposed rule will not cause producers to incur any noteworthy new costs and therefore does not require a small business economic impact statement under the provisions of RCW 19.85.025(3).
A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Jim Tompkins, P.O. Box 40258, Olympia, WA 98504-0258, phone (360) 725-7036, fax (360) 586-3109, e-mail rulescoordinator@oic.wa.gov.
August 25, 2015
Mike Kreidler
Insurance Commissioner
NEW SECTION
WAC 284-17-805 Charitable contributions.
(1) An insurance producer may pay or assign all or a portion of a commission, fee, or other consideration received in connection with the sale, solicitation, or negotiation of insurance to a bona fide charitable or nonprofit organization as defined in chapter 48.30 RCW if all of the following conditions are met:
(a) The insured or prospective insured has no influence over which bona fide charitable or nonprofit organization receives the payment or assignment;
(b) The payment or assignment is not made in the insured's or prospective insured's name;
(c) The insured or prospective insured is not entitled to a tax benefit for the payment or assignment; and
(d) The insured or prospective insured does not select or influence the selection of the person or persons who benefit from the bona fide charitable or nonprofit organization.
(2) An insurance producer may sponsor events for, or make contributions to a bona fide charitable or nonprofit organization if the sponsorship or contribution is not conditioned upon any person affiliated with or interested in the bona fide charitable or nonprofit organization applying for or obtaining insurance through the insurance producer.
(3) An insurance producer may not sponsor events for or make contributions to a bona fide charitable or nonprofit organization if the sponsorship or contribution is conditioned upon the referral of insurance business to the insurance producer or endorsement of the insurance producer or insurance product by the bona fide charitable or nonprofit organization.
NEW SECTION
WAC 284-17-825 Referrals.
(1) An unlicensed individual who receives referral compensation under section 3, chapter 272, Laws of 2015 is not selling, soliciting, or negotiating insurance if all of the following conditions are met:
(a) The referral compensation does not depend upon whether the referral results in a purchase or sale;
(b) If insurance is purchased, the purchase is not a factor in determining the value of the referral compensation; and
(c) The recipient of the referral compensation does not make representations to the prospective insured about the terms of or specific need for a policy, or the quality or features of the insurance producer or insurer.
(2) Referral compensation given to an individual under section 3, chapter 271, Laws of 2015 is limited to no more than one hundred dollars in value per referring individual in any consecutive twelve-month period.
NEW SECTION
WAC 284-17-835 Promotional games of chance.
An insurance producer may conduct a promotional game of chance provided that:
(1) The promotional game of chance is undertaken solely for the purpose of advertising and promoting the insurance producer;
(2) No person eligible to receive the prize is required to apply for insurance, purchase insurance, refer a person to the insurance producer, or pay any other consideration to enter the promotional game of chance;
(3) The promotional game of chance is open to the general public;
(4) The value of the prize is limited to one hundred dollars in value;
(5) No person receives a total of prizes exceeding one hundred dollars in value in the aggregate in any consecutive twelve-month period from the insurance producer; and
(6) The promotional game of chance complies with chapter 9.46 RCW and any and all other applicable Washington state statutes and rules.
REPEALER
The following sections of the Washington Administrative Code are repealed:
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